Empower teams with measurable goals
Startups can take a long time to find their feet. The best ideas can be challenging to build. And, even with a product ready to sell, you still need to find the best way to bring your product to market. Early startup recruits often fail. When growth takes off, a startup could be on its fifth salesperson, fourth marketing manager, third customer success manager, and second product manager.
While some recruits fail because they cannot deliver results, many fail because of unclear goals. This confusion is why it’s so important for founders to define clear, measurable, and achievable objectives for their teams.
Ideally, you should outline these before you hire (we hire to solve specific problems, after all) so that you can communicate them during the recruiting process. When you know what success looks like, it’s easier to get there.
Set measurable goals
A simple and measurable target leaves no ambiguity. So, startup leaders should set goals for the team to measure and move. Growth teams, for example, have two goals: find and close opportunities. So, their most important KPIs are:
- The number of high-quality leads/opportunities they can find.
- How much future revenue can they win the business (by converting leads into customers)?
Someone needs to be accountable for each of these goals in every business. Marketing or outbound sales typically find leads while (inbound) sales close them. Sales own both when salespeople are responsible for finding and closing their opportunities. Marketing holds both for self-service/bottom-up growth models where customers typically sign up without talking to a salesperson.
While lead attraction and revenue growth are the KPIs that matter most, mature teams measure more than these two numbers. Conversion rates between sales stages, for example. Teams might also evaluate salesperson performance based on how customer outcomes. For example, sales leaders expect a low percentage of new customers to churn within the first year, and if you track this by salesperson, you can evaluate the quality of each deal. When churn is high for a particular salesperson, this could indicate they prioritise leads poorly and oversell the product.
All teams within a startup should have some KPIs:
- Each customer support agent needs a daily, weekly, or monthly target for customer support cases. Measure support quality through time-to-first-response and customer satisfaction scores—benchmark support agent performance based on the top performers in the team.
- Finance teams should track financial KPIs such as cash position, accounts receivable aging, and prompt payroll.
- Employee engagement/eNPS, employee turnover rate, time-to-fill positions, admin cost-per-hire, and absenteeism should be tracked by HR teams.
- The most crucial measure for early-stage product development teams is iteration speed. Startups need to experiment their way towards product-market fit, and the faster they move, the sooner they’ll get there. Measuring this is more art than science: ask your team to set aggressive delivery goals and regularly grade their own performance. Mature product-development teams are often easier to measure, as they will likely own areas of the product for the long term. For example, a team working on a customer sign-up workflow could measure conversion rate improvements over time.
- Quantify customer success team performance based on expansion revenue, customer retention, and customer satisfaction.
One benefit of measurable goals is that they are easy to incentivise. Pay salespeople commissions based on their revenue, and pay bonuses to other team members based on their respective KPIs.
Ensure your team can move the numbers
To achieve great results, people need control over what they do and be motivated by tangible business outcomes. Effective delegation requires a balance of these two forces, a topic I’ve written more about already.
Only hold people accountable for delivering outcomes that they can control:
- A salesperson with no top-of-funnel responsibilities can’t be expected to win revenue without any leads in the pipeline.
- A product manager who does not control engineering hiring and resource allocation should not be accountable for delivery timelines.
- A marketing manager should not be expected to ramp up lead numbers if they have no say in product positioning and targeting.
When you set the goals for a role, make sure your expectations are reasonable, given the amount of control a person has over what they do and how they do it. Hold employees and teams with absolute autonomy to a high standard, with broad and ambitious expected outcomes. Groups and individuals with very little autonomy should have appropriately scoped KPIs.
What happens when we fail?
It’s essential to reflect on your progress relative to your goals frequently. If a team or individual repeatedly fails to deliver, you have a few options:
- Help the team. Ideally, everyone can achieve great things independently. In reality, most teams need guidance to achieve their goals.
- Adjust the goal. If you discover your targets are unreasonable, you might need to lower your expectations.
- Try again with a new team. Sometimes, people aren’t cut out for their current role. This reality is inevitably painful for everyone involved, but your primary role as a startup leader is to find the right people to grow the business. If, at first, you don’t succeed, try again. It’s better to make this decision quickly than to lose many months of progress deliberating.
Founders willing to make tough resourcing decisions quickly are more likely to succeed than those who dither. This is the uncomfortable reality of any leadership role.
15 May, 2023
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